The Australian share market hit a six month high to close stronger on Wednesday as investors remained optimistic about economic data from offshore due overnight.

The benchmark S&P/ASX200 index was up 21.2 points, or 0.45 per cent, at 4,722.6, while the broader All Ordinaries index had gained 20.6 points, or 0.43 per cent, to 4,793.8 points. It was the S&P/ASX200 index's highest close since May 5 when it finished at 4674.03. On the ASX24, the December share price index futures contract was up 25 points at 4,726, with 22,589 contracts traded.

Westpac, NAB and ANZ have yet to respond to Tuesday's 25 basis point interest rate rise by the Reserve Bank of Australia (RBA), although Commonwealth Banks 45 basis point rise afterwards almost double the official increase, sparked widespread condemnation.

The federal government says reforms aimed at making the banking sector more competitive will be announced next month. The four major banks closed mostly higher. ANZ led the gains, up 17 cents at $25.20. Westpac rose 11 cents at $23.42 and National Australia Bank was two cents higher at $25.87 and Commonwealth Bank ended down 29 cents at $49.90.

BHP Billiton rose 36 cents to close at $42.63 and Rio Tinto climbed 68 cents at $83.39. Fortescue Metals was seven cents higher at $6.49.

Major companies in the retail sector were some of the worst peformers on the S&P/ASX 100, with Harvey Norman and David Jones among in the top three worst performers. Harvey Norman ended down seven cents, or 2.16 per cent, at $3.17, David Jones dropped 10 cents, or 2.09 per cent, at $4.69, Myer Holdings fell four cents, or 1.03 per cent, at $3.85 and JB Hi-Fi was down 14 cents at $19.62.

Major companies in the energy sector finished mostly higher after strong gains in crude oil price overnight. Woodside closed up 48 cents, or 1.1 per cent, at $44.08, Santos gained seven cents to $12.74 and Oil Search was down five cents at $6.49.

In market news on Wednesday, CSR reported a return to profitability in the half year to September 30 and says it expects earnings in its building products businesses to grow in the current year. CSR was up one cent at $1.81. Australia's biggest insurance company, QBE Insurance Group, has completed the takeover of Belgium's Secura NV following regulatory approvals. Shares in QBE were up three cents at $17.49.

Canadian based Eldorado Gold announced it had shipped first iron ore from its Vila Nova mine in Brazil. Eldorado was up 44 cents, or 2.5 per cent, at $18.01. The spot price of gold in Sydney was $1,354.80 per fine ounce, down $1.75 from Tuesday's local close of $1,356.55. Gold miner Newcrest Mining was up 46 cents, or 1.15 per cent, at $40.39.

The top traded stock by volume was Cellmid, with 377.64 million shares worth $15.35 million changing hands. Cellmid shares were up 4.1 cents, or 215.79 per cent, at six cents, after announcing it completed the development of a blood test for early cancer diagnosis. Preliminary national turnover was 2.49 billion shares worth $4.60 billion, with 594 stocks up, 493 down and 397 unchanged.

The Australian dollar drifted lower in Asia trade Wednesday on a weaker than expected report on September building approvals, although the currency remained just off parity with the U.S. dollar ahead of an upcoming decision from that country's central bank. Australian bonds gained slightly on both ends of the curve a day after selling off broadly as the Reserve Bank of Australia surprised economists by hiking its key cash rate 25 basis points to 4.75%.

The RBA's Tuesday move had kicked off a late rally in the Australian dollar, which carried into overnight trading and saw the currency reach its highest point against the U.S. dollar since the currency was floated in 1983. At its overnight peak, the Australian dollar reached as high as $1.0022. But those gains were stunted early Wednesday as Australian residential building approvals fell sharply in September, with approvals now standing at their lowest level since June 2009.

In all, the total number of Australian houses and apartments approved for construction fell a seasonally adjusted 6.6% in September from August, the Australian Bureau of Statistics said. Economists had expected on average that total residential building approvals would rise 1.0% from the month before. The Australian dollar traded at $0.9974, down slightly from $0.9980 late Tuesday. Against the Japanese yen, the currency traded at 80.455, up from 80.385.